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Make Nice Time With CAW? GM In Early Talks For 3rd Vehicle At Oshawa

3K views 47 replies 30 participants last post by  Coloradokid 
#1 ·
Link: http://www.reuters.com/article/marketsNews/idCAN0642509820080606?rpc=44

DETROIT, June 6 (Reuters) - General Motors Corp said on Friday it was in very early discussions with the Canadian Auto Workers union about adding another model to its car plant in Oshawa, Ontario, after deciding to close a nearby truck plant.

The discussions about a potential third car for the Oshawa car production line, earmarked to make the Chevrolet Camaro and a still unnamed second car, began this week after GM announced it was closing its truck plant in Oshawa, said Stew Low, a spokesman for GM Canada.

The CAW has protested GM's decision to close the Oshawa truck plant in 2009, saying it violates a just-ratified labor contract. CAW President Buzz Hargrove and GM Chief Executive Rick Wagoner met on Friday at GM's headquarters in Detroit.
 
#7 ·
exactly. As a base engine on any future RWD cars GM needs to combine the 3.9L and 6 speed auto. That should get you about 19/29 which is more than respectable. If the G8 had the DI V6 and 6 speed standard it would likely get 18/27 which is hardly gas guzzling.
 
#19 ·
3rd car is ??? GMC Denali concept??
Ohhhh the Denali XT? :dro: I hope so. i hope it has that fancy powertain too. I'll have to start saving my pennies now. :yup:
 
#17 ·
This is not a "make nice offer." Things like this are many months down the pipeline already. They knew they might send something else to Oshawa car before they knew they were closing the truck plant, no doubt. I hope they do get something else, but it is not simply to appease the angry union. I just hope it's not anyway. And I hope it's something people actually want to buy. And since nobody else has said it (in this thread yet) and it will inevitable come up...Firebird? I'd prefer to see the GTO name come back, but on a tarted up G8, if it's a Camaro cousin, Firebird is appropriate.
 
#18 ·
While I am not dismissing that fuel costs may keep rising, keep in mind...this is exactly what all "experts" predicted back in the 70's...and then 15 years later, gasoline was $0.69 a gallon.
 
#24 ·
The G8 gets almost exactly the same fuel economy as the V6 Malibu so what does smaller fwd get you? The G8 only has the 5 speed as well.

Maybe it is the GMC concept truck but if it had a regular powertrain it doesn't look like it would get any better fuel economy than the current trucks. It appears to be big, wide, and heavy. Maybe I'm wrong. It needs to have more than a 3500lb towing capacity or I might just as well buy a minivan. Why buy a full size truck that can't tow?
 
#26 ·
I'm not sure what GM is planning on building at Oshawa besides the Camaro, but I am sure they have been planning three cars for some time. The Camaro alone would not make the investment possible.

Regarding small cars, if you build a small car that is the best in it's class, those pennies you make on each one will get multiplied many more times than bulding a car that is only acceptable and selling a few.
 
#28 ·
I read a book about peak oil a few months ago and the author proposed that once there wasn't any excess production capacity (to moderate price swings), the price does not forever march upward as you might think.

Instead, is swings wildly in each direction. What happens (and seems to be happening now) is something like this: capacity gets tight, prices start rising quickly. Rising energy prices cause economic slowdowns and people respond to rapidly rising prices by making efforts to reduce use (hence the collapse of truck sales). This eases demand, which create an equal 'panic' on the supplier side, and the price of energy drops off.

This reduction in price gets the economy rolling again, demand increase and the cycle start anew. While the overall trend (over time) is still upward, the near term trend is really difficult to predict.

For a large carmaker, this scenerio is a nightmare. You're pretty much guaranteed to always be a half cycle out of sync, with huge investments in products that won't sell. In fact, for GM, it would be better if the price of gas just marched forever upward; after the initial shock, they could adapt their product mix and be back on track in a couple of years. But, price instability on gas is just murder from a product planning perspective.
 
#41 ·
I read somewhere that the take rate on G8 V8's is about 80%.
All of the G8's I've seen on the street (I've seen several) were GT's.
 
#34 ·
Ok..there are still 2 car lines in Oshawa.
"Line 1" - FWD Impala and Lacrosse (runs on three shifts)

"Line 2" - this is the new "flex" line which is still getting its finishing touches and will not start operation until the October/November timeframe. At that time the Camaro will begin production on one shift only. GM has already committed to a second vehicle, which would add a second shift to the flex line sometime before 2011. This "mystery third vehicle" that has just popped up in media reports has been rumoured for months and if true, would add a third shift to the flex line. Of course the time frame is unknown because no one knows for sure if this third vehicle will come to be.

Line 1 (FWD Impala) is only scheduled to run until 2012 at the latest (for now anyway).

GM has run our Sierra/Silverado truck bodies through our new carplant paint shop in recent months. One would think they are not doing this "just for curiosity". Insert rumour here because the main issue with Oshawa Truck is that the paint shop needs updating (but they still manage to win Quality awards..go figure).
Anyway, when GM preaches to the public about quality, productivity, etc. they go and shut down their most productive, highest quality plant. The two days following the announcement Oshawa Truck wins the Harbour Report award for most productive truck plant and then J.D. Power's Initial Quality award. There were certainly better candidates in GM's truck plant family that could have been mothballed. Lots of egg on lots of faces in Detroit. Even shareholders went...WHAT???
 
#36 ·
Ok..there are still 2 car lines in Oshawa.
"Line 1" - FWD Impala and Lacrosse (runs on three shifts)

"Line 2" - this is the new "flex" line which is still getting its finishing touches and will not start operation until the October/November timeframe. At that time the Camaro will begin production on one shift only. GM has already committed to a second vehicle, which would add a second shift to the flex line sometime before 2011. This "mystery third vehicle" that has just popped up in media reports has been rumoured for months and if true, would add a third shift to the flex line. Of course the time frame is unknown because no one knows for sure if this third vehicle will come to be.

Line 1 (FWD Impala) is only scheduled to run until 2012 at the latest (for now anyway).

GM has run our Sierra/Silverado truck bodies through our new carplant paint shop in recent months. One would think they are not doing this "just for curiosity". Insert rumour here because the main issue with Oshawa Truck is that the paint shop needs updating (but they still manage to win Quality awards..go figure).
Anyway, when GM preaches to the public about quality, productivity, etc. they go and shut down their most productive, highest quality plant. The two days following the announcement Oshawa Truck wins the Harbour Report award for most productive truck plant and then J.D. Power's Initial Quality award. There were certainly better candidates in GM's truck plant family that could have been mothballed. Lots of egg on lots of faces in Detroit. Even shareholders went...WHAT???
I'm guessing that, with the weak US dollar, it costs a lot more in labor costs to build a vehicle north of the border than in the US (or Mexico). Doesn't matter much if it takes 3 less man hours to build a vehicle if each employee makes 50% more. Plus, as you say, they would have to spend money pretty soon on redoing the paint shop. So, they don't bother to spend the dough on the paint shop and shut it down.
 
#38 ·
Of course the NYT and Goldman Sachs are predicting higher oil prices. The fact of the matter is they are more into the chicken little mentallity instead of real facts...they're going for shock factor and hoping their "predictions" will have an effect on the market that will benefit them. Here's a different point of view:
http://money.cnn.com/2008/06/06/news/economy/tully_oil_bust.fortune/index.htm
The same thing was going on when my 1979 Pickup was on the lot at a Chevrolet dealership....look what has happened since. Gasoline efficient cars are a nice trend for now, but I really think we'll have alternative fuels in our country's portfolio in the future that will allow for our beloved family mobiles and trucks.
 
#40 ·
GM is still on pace to sell about 100,000 trucks in Canada this year...not bad numbers for such a small country population-wise and more than enough to justify at least one shift. They want to produce in countries where the product sells. One shift in Oshawa would roughly produce 100,000 units in a calendar year...right in line with sales. Sales are down on either side of the border, but percentage wise, not as much up here. GM trucks are still going like hot-cakes out west were the economy is strong and growing. As far as labour costs go, its a wash right now, and you would be hard pressed to find an economist that does not expect the US dollar to rebound in the long run. As for the shareholders, they are aware Oshawa Truck is profitable and good for them for asking for explanations. But in the end, you are probably correct...marginal investment was needed in the near future for the paint shop and this company has to be very careful where and when it spends. One plant had to go and what's done is done. However, through no fault of their own, the workers are caught in the middle and have a right to be peeved. Man, you negotiate hundreds of millions of dollars in concessions and two weeks later it's not worth a pinch of **** s**t.
 
#44 · (Edited)
Trucks built in Oshawa aren't profitable, they lose $730 per truck. Trucks built in Oshawa do not sell, they build the crew cab and ext cab which is sold for non-business reasons. Paintshop and improvements to the truck plant to make it up to government standards in a few years can run for nearly $500m. Other plants are more profitable, are able to build other types of trucks that are being sold, do not need significant upgrades in order to move onto the future. Shareholders would rather GM be profitable than throw money away on liabilities.
 
#42 ·
Maybe GM should build scooters in Oshawa.
 
#45 ·
I understand GM needs to make money for shareholders but when you shut down an AWARD WINNING plant .You had better be thinking of putting something else there that will make you money and gain CONSUMER CONFIDENCE on GM products.A lot of the other plants do not follow the same MATRIX as CANADIAN PLANTS because THEY DON'T KNOW HOW TO FOLLOW THEM and DON'T WANT TO BE THE ONES SHUT DOWN....RIGHT ROMULUS?????
 
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